Venezuela courts India to strengthen oil ties amid US sanctions
By Ratnajyoti Dutta, Eklavya Gupte and Sambit Mohanty / Platts
Petroleumworld 02 11 2019
Venezuela's oil minister is in New Delhi this week hoping to convince India's key refiners to buy more of its crude and forge closer ties as the South American nation finds itself internationally isolated after the US imposed crippling sanctions on state-owned PDVSA last month.
Manuel Quevedo told reporters Monday that he is hoping to continue Venezuela's healthy relations with India, which has now emerged as the driver of global oil demand growth.
"We have a good relationship with India and we want to continue this relationship," Quevedo said to reporters on the sidelines of the Petrotech event in New Delhi. "[Despite current US sanctions] we will continue the trade and simply expand all the trade and relationship."
"We are selling more than 300,000 b/d to India. We want to increase that amount. India also wants to increase intake from us. We want to double that amount," the Venezuelan minister added.
Quevedo, who met with India's oil minister Dharmendra Pradhan earlier in the day, also admitted that his country's crude production -- currently at 1.57 million b/d -- has already been hampered by the sanctions.
Pradhan put out a tweet saying the two "explored possibilities for Indian investments in Venezuela's producing blocks" during the meeting with his Venezuelan counterpart.
DEMAND FROM INDIAN PRIVATE REFINERS
India's two private refiners, Reliance and Nayara Energy, are significant buyers of Venezuelan crude and shipments to both these companies are expected to rise in the coming weeks, according to industry sources.
"We will establish contacts with all buyers. We will continue our relationship with present buyers like Reliance and Nayara," Quevedo said.
Both of the refiners operate high-complexity plants in western India designed to process discounted heavy crudes, and they receive a steady flow of Venezuelan crude through their contracts.
India also has some upstream interests in Venezuela.
ONGC Videsh Ltd, the overseas arm of state-owned upstream major Oil and Natural Gas Corp, has a 40% stake in the San Cristobal oil field in Venezuela, for example.
Despite sour political relations between the countries, Venezuela used to export around 500,000 b/d of its crude to the US.
Since sanctions have come into place, the Latin American country is desperate to expand its list of crude buyers and forge closer ties with existing customers.
However, even refiners in Europe appear to be reluctant to buy more Venezuelan crude due to the current crisis.
On January 28, the administration of US President Donald Trump unveiled sanctions on PDVSA, which served as a de facto ban on US crude imports of Venezuelan oil and an immediate ban on US exports of diluent to Venezuela.
The new sanctions require any payment for crude from PDVSA to be deposited into blocked accounts within the US.
The funds would ultimately be transferred to a new Venezuelan government, led on an interim basis by opposition leader Juan Guaido, if and when President Nicolas Maduro relinquishes power. The US last month formally recognized Guaido as Venezuela's president.
On February 1, the US Treasury also gave non-US companies three months to wind down transactions with PDVSA that involve the US financial system, essentially prohibiting sales of PDVSA crude and products in dollars.
Sources have told S&P Global Platts that Venezuela might have to shut more than a quarter of its already reeling oil production in the coming weeks, with US sanctions preventing PDVSA from importing diluent needed to extract its extra heavy crude.
In its most recent monthly OPEC production survey, Platts estimated that the country pumped 1.16 million b/d in January.
We invite you to join us as a sponsor.
Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.
Story by Ratnajyoti Dutta, Eklavya Gupte and Sambit Mohanty; Edited by James Leech from Platts / SPGlobal.
spglobal.com 02 11 2019
Hit your target - Advertise with us
PW 300.000 plus request per week
Copyright© 1999-2019 Petroleumworld or respective author or news agency. All rights reserved.
We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.
Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to email@example.com
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: firstname.lastname@example.org
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels